HOW SAVINGS BANKS EARN
How can a bank that does not discount notes or deal in loans and
commercial paper earn money? How can it pay interest?
While they may be individually small, the aggregate of all the
deposits in a savings bank may, and often do, amount to many
millions.
This money is not allowed to lie idle.
Under the skilled direction of the bank officers, the money,
instead of lying idle in the vaults, is invested in many ways, but
always in accordance with the laws of the state under which the
bank is chartered.
Much of the money is invested in mortgages on real estate, never
on personal property.
National bank stocks, sound railroad bonds, and other forms of
reliable interest security are fields for the investment of
savings bank funds.
Savings banks are subject to the periodic inspection of state
officers appointed for the purpose.
The failure of a savings bank through bad investments or the
dishonesty of officials is very rare.
Avoid all banks that promise more than the regular rate of
interest.
Private banks may be, and usually are, honestly conducted, but to
be safe, deposit only with a bank that is regularly chartered and
is subject to the inspection of the law.
The savings bank is the best for the wage earner.
